Please enter verification code
Confirm
Rational Decision-Making Process Choosing Fairness Over Monetary Gain as Decision Criteria
Psychology and Behavioral Sciences
Volume 3, Issue 6-1, December 2014, Pages: 16-23
Received: Nov. 30, 2014; Accepted: Dec. 3, 2014; Published: Mar. 7, 2015
Views 3832      Downloads 177
Author
Nicoladie D. Tam, Department of Biological Sciences, University of North Texas, Denton, TX 76203, USA
Article Tools
Follow on us
Abstract
Objective: This study tests the hypothesis that the decision-making process in humans is often based on the fairness rather than the monetary gain/loss, when they are confronted with a choice between fairness and monetary gain/loss. Methods: The classical Ultimatum Game (UG) is used as the experimental paradigm to quantify the threshold crossover-point to switch the decision from rejection to acceptance. The fairness stimulus-response function is used for quantifying the decision threshold and the co-variation relationship between fairness and monetary gain/loss. Results: The results show that the level of fairness perception is always 27.5% lower for the rejection decision than the acceptance decision, irrespective of the offer-ratio (i.e., monetary gain/loss) or the baseline level of fairness for that decision. The data also show a co-variation relationship between fairness and offer-ratio (monetary gain/loss), but such proportionality relationship is decoupled at the even-split singularity point. The analysis shows that the decision crossover threshold is located at a slightly unfair perception, indicating tolerance to some unfairness in the decision. This suggests that a rejection decision is made when the unfairness perception threshold is reached. Conclusion: These analyses validated the hypothesis that the decision to accept/reject the monetary offer is logically consistent using the fairness criterion as the threshold for decision along the fairness-axis — even for accepting inequitable offers or rejecting hyper-equitable offers, irrespective of the amount of monetary gain/loss. The apparent decision based on the monetary gain/loss criterion is only a side effect of the co-variation between fairness and monetary gain.
Keywords
Decision-Making, Fairness Bias, Equity, Rational Decision, Monetary Gain, Ultimatum Game
To cite this article
Nicoladie D. Tam, Rational Decision-Making Process Choosing Fairness Over Monetary Gain as Decision Criteria, Psychology and Behavioral Sciences. Special Issue: Behavioral Neuroscience. Vol. 3, No. 6-1, 2014, pp. 16-23. doi: 10.11648/j.pbs.s.2014030601.13
References
[1]
C. Civai, C. Corradi-Dell'Acqua, M. Gamer, and R. I. Rumiati, “Are irrational reactions to unfairness truly emotionally-driven? Dissociated behavioural and emotional responses in the Ultimatum Game task,” Cognition, vol. 114, pp. 89-95, Jan 2010.
[2]
M. Koenigs and D. Tranel, “Irrational economic decision-making after ventromedial prefrontal damage: evidence from the Ultimatum Game,” J Neurosci, vol. 27, pp. 951-956, Jan 24 2007.
[3]
Y. Lee, “Neural basis of quasi”rational decision making,” Current Opinion in Neurobiology, vol. 16, pp. 191-198, 2006.
[4]
A. G. Sanfey, “Social decision-making: Insights from game theory and neuroscience,” Science, vol. 318, pp. 598-602, 2007.
[5]
A. G. Sanfey, G. Loewenstein, S. M. McClure, and J. D. Cohen, “Neuroeconomics: cross-currents in research on decision-making,” Trends Cogn Sci, vol. 10, pp. 108-16, Mar 2006.
[6]
M. H. Bazerman, “Fairness, social comparison, and irrationality,” in Social psychology in organizations: Advances in theory and research, J. K. Murnighan, Ed., ed Englewood Cliffs, NJ: Prentice-Hall, 1993, pp. 184–203.
[7]
E. Fehr and S. Gächter, “Altruistic punishment in humans,” Nature, vol. 415, pp. 137-140, Jan 10 2002.
[8]
M. Egas and A. Riedl, “The economics of altruistic punishment and the maintenance of cooperation,” Proc Biol Sci, vol. 275, pp. 871-878, Apr 22 2008.
[9]
D. J. de Quervain, U. Fischbacher, V. Treyer, M. Schellhammer, U. Schnyder, A. Buck, et al., “The neural basis of altruistic punishment,” Science, vol. 305, pp. 1254-1258, Aug 27 2004.
[10]
C. D. Batson, J. Fultz, P. A. Schoenrade, and A. Paduano, “Critical self-reflection and self-perceived altruism: when self-reward fails,” J Pers Soc Psychol, vol. 53, pp. 594-602, Sep 1987.
[11]
C. D. Batson, B. D. Duncun, P. Ackerman, T. Buckley, and K. Birch, “Is empathic emotion a source of altruistic motivation?,” J Person Soc Psych, vol. 40, pp. 290–302, 1981.
[12]
S. Israel, E. Lerer, I. Shalev, F. Uzefovsky, M. Riebold, E. Laiba, et al., “The oxytocin receptor (OXTR) contributes to prosocial fund allocations in the dictator game and the social value orientations task,” PLoS One, vol. 4, p. e5535, 2009.
[13]
A. Knafo, S. Israel, A. Darvasi, R. Bachner-Melman, F. Uzefovsky, L. Cohen, et al., “Individual differences in allocation of funds in the dictator game associated with length of the arginine vasopressin 1a receptor RS3 promoter region and correlation between RS3 length and hippocampal mRNA,” Genes Brain Behav, vol. 7, pp. 266-75, Apr 2008.
[14]
X. Li and L. Cao, “Largest Laplacian eigenvalue predicts the emergence of costly punishment in the evolutionary ultimatum game on networks,” Phys Rev E Stat Nonlin Soft Matter Phys, vol. 80, p. 066101, Dec 2009.
[15]
E. C. Seip, W. W. van Dijk, and M. Rotteveel, “On hotheads and Dirty Harries: the primacy of anger in altruistic punishment,” Ann N Y Acad Sci, vol. 1167, pp. 190-196, Jun 2009.
[16]
T. Singer, B. Seymour, J. P. O'Doherty, K. E. Stephan, R. J. Dolan, and C. D. Frith, “Empathic neural responses are modulated by the perceived fairness of others,” Nature, vol. 439, pp. 466-469, Jan 26 2006.
[17]
P. A. van Lange, “Does empathy trigger only altruistic motivation? How about selflessness or justice?,” Emotion, vol. 8, pp. 766-774, Dec 2008.
[18]
D. Knoch, A. Pascual-Leone, K. Meyer, V. Treyer, and E. Fehr, “Diminishing reciprocal fairness by disrupting the right prefrontal cortex,” Science, vol. 314, pp. 829-32, Nov 3 2006.
[19]
B. Güroğlu, W. van den Bos, S. A. Rombouts, and E. A. Crone, “Unfair? It depends: neural correlates of fairness in social context,” Soc Cogn Affect Neurosci, vol. 5, pp. 414-423, Dec 2010.
[20]
H. Takagishi, S. Kameshima, J. Schug, M. Koizumi, and T. Yamagishi, “Theory of mind enhances preference for fairness,” J Exp Child Psychol, vol. 105, pp. 130-137, Jan-Feb 2010.
[21]
J. K. Rilling, A. G. Sanfey, J. A. Aronson, L. E. Nystrom, and J. D. Cohen, “The neural correlates of theory of mind within interpersonal interactions,” Neuroimage, vol. 22, pp. 1694-1703, Aug 2004.
[22]
A. G. Sanfey, J. K. Rilling, J. A. Aronson, L. E. Nystrom, and J. D. Cohen, “The neural basis of economic decision-making in the Ultimatum Game,” Science, vol. 300, pp. 1755-1758, Jun 13 2003.
[23]
D. Tam, “Variables governing emotion and decision-making: human objectivity underlying its subjective perception,” BMC Neuroscience, vol. 11, p. P96, Jul 20 2010.
[24]
D. N. Tam, “Computation in emotional processing: quantitative confirmation of proportionality hypothesis for angry unhappy emotional intensity to perceived loss,” Cogn Comput, vol. 3, pp. 394-415, 2011/06/01 2011.
[25]
N. D. Tam, “Quantification of happy emotion: Dependence on decisions,” Psychol Behav Sci, vol. 3, pp. 68-74, April 6, 2014 2014.
[26]
N. D. Tam, “Quantification of happy emotion: Proportionality relationship to gain/loss,” Psychol Behav Sci, vol. 3, pp. 60-67, April 6, 2014 2014.
[27]
K. A. Hegtvedt and C. Killian, “Fairness and Emotions: Reactions to the Process and Outcomes of Negotiations,” Social Forces, vol. 78, pp. 269-303, 1999.
[28]
J. Jaeger, J. C. Borod, and E. Peselow, “Facial expression of positive and negative emotions in patients with unipolar depression,” J Affect Disord, vol. 11, pp. 43-50, Jul-Aug 1986.
[29]
J. von Neumann, O. Morgenstern, and A. Rubinstein, Theory of games and economic behavior. Princeton, NJ: Princeton University Press, 1953.
[30]
W. Güth, R. Schmittberger, and B. Schwarze, “An experimental analysis of ultimatum bargaining,” J Econ Behav Organization, vol. 3, pp. 367–388, Dec 1982.
[31]
C. Camerer and R. H. Thaler, “Anomalies: Ultimatums, dictators, and manner,” J Econ Persp, vol. 9, pp. 209–219, 1995.
[32]
C. Camerer, Behavioral game theory: Experiments in strategic interaction: Princeton University Press, 2003.
[33]
J. H. Kagel and A. E. Roth, The handbook of experimental economics: Princeton University Press, 1995.
[34]
D. A. Braun, P. A. Ortega, and D. M. Wolpert, “Nash equilibria in multi-agent motor interactions,” PLoS Comput Biol, vol. 5, p. e1000468, Aug 2009.
[35]
K. Sigmund, C. Hauert, and M. A. Nowak, “Reward and punishment,” Proc Natl Acad Sci U S A, vol. 98, pp. 10757-10762, Sep 11 2001.
[36]
J. K. Rilling, B. King-Casas, and A. G. Sanfey, “The neurobiology of social decision-making,” Curr Opin Neurobiol, vol. 18, pp. 159-165, Apr 2008.
[37]
E. Reuben and F. van Winden, “Fairness perceptions and prosocial emotions in the power to take,” J Econ Psych, vol. 31, pp. 908–922, 2010.
[38]
B. Güroğlu, W. van den Bos, and E. A. Crone, “Fairness considerations: increasing understanding of intentionality during adolescence,” J Exp Child Psychol, vol. 104, pp. 398-409, Dec 2009.
[39]
H. Takagishi, T. Takahashi, A. Toyomura, N. Takashino, M. Koizumi, and T. Yamagishi, “Neural correlates of the rejection of unfair offers in the impunity game,” Neuro Endocrinol Lett, vol. 30, pp. 496-500, 2009.
[40]
T. Yamagishi, Y. Horita, H. Takagishi, M. Shinada, S. Tanida, and K. S. Cook, “The private rejection of unfair offers and emotional commitment,” Proc Natl Acad Sci U S A, vol. 106, pp. 11520-11523, Jul 14 2009.
[41]
T. Singer and N. Steinbeis, “Differential roles of fairness- and compassion-based motivations for cooperation, defection, and punishment,” Ann N Y Acad Sci, vol. 1167, pp. 41-50, Jun 2009.
[42]
G. Tabibnia, A. B. Satpute, and M. D. Lieberman, “The sunny side of fairness: preference for fairness activates reward circuitry (and disregarding unfairness activates self-control circuitry),” Psychol Sci, vol. 19, pp. 339-347, Apr 2008.
[43]
M. M. Pillutla and J. K. Murnighan, “Unfairness, Anger, and Spite: Emotional Rejections of Ultimatum Offers,” Org Behav Human Decis Proc, vol. 68, pp. 208-224, 1996.
[44]
S. F. Brosnan and F. B. De Waal, “Monkeys reject unequal pay,” Nature, vol. 425, pp. 297-299, Sep 18 2003.
[45]
N. D. Tam, “A decision-making phase-space model for fairness assessment,” Psychol Behav Sci, vol. 3, pp. 8-15, 2014.
[46]
N. D. Tam, “Quantification of fairness perception by including other-regarding concerns using a relativistic fairness-equity model,” Adv in Soc Sci Research J, vol. 1, pp. 159-169, 2014.
[47]
N. D. Tam, “Quantification of fairness bias in relation to decisions using a relativistic fairness-equity model,” Adv in Soc Sci Research J, vol. 1, pp. 169-178, 2014.
[48]
D. N. Tam, “Contributing factors in judgment of fairness by monetary value,” BMC Neuroscience, vol. 12, p. P329, 2011.
[49]
D. N. Tam, “Quantification of fairness bias by a Fairness-Equity Model,” BMC Neuroscience, vol. 12, p. P327, 2011.
[50]
K. M. Harle and A. G. Sanfey, “Incidental sadness biases social economic decisions in the Ultimatum Game,” Emotion, vol. 7, pp. 876-881, Nov 2007.
[51]
M. J. Crockett, L. Clark, G. Tabibnia, M. D. Lieberman, and T. W. Robbins, “Serotonin modulates behavioral reactions to unfairness,” Science, vol. 320, p. 1739, Jun 27 2008.
ADDRESS
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
U.S.A.
Tel: (001)347-983-5186